Judgments nº T-735/14 of Tribunal General de la Unión Europea, September 13, 2018

• Resolution Date: September 13, 2018
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-735/14

(Common foreign and security policy - Restrictive measures adopted in view of Russia’s actions destabilising the situation in Ukraine - Applicant’s name included and retained on the list of entities to which the restrictive measures apply - Obligation to state reasons - Legal basis - Partnership and Cooperation Agreement between the European Union and Russia - Right to property - Right to carry on an economic activity - Proportionality)

In Cases T-735/14 and T-799/14,

Gazprom Neft PAO, formerly Gazprom Neft OAO, established in Saint Petersburg (Russia), represented by L. Van den Hende, J. Charles, lawyers, and S. Cogman, Solicitor,

applicant,

v

Council of the European Union, represented by M. Bishop and S. Boelaert, acting as Agents,

defendant,

supported by

United Kingdom of Great Britain and Northern Ireland, represented initially by C. Brodie and S. Simmons, and subsequently by C. Brodie and V. Kaye, and subsequently by C. Brodie, C. Crane and S. Brandon, and finally by C. Brodie, R. Fadoju and M. Brandon, acting as Agents, and by G. Facenna QC and C. Banner, Barrister,

and by

European Commission, represented by L. Havas, T. Scharf and D. Gauci, acting as Agents,

interveners,

APPLICATION under Article 263 TFEU seeking annulment of (i) Article 1(2)(b), (c) and (d), Article 1(3) and (4), Article 4, Article 4a and Article 7(1)(a) of, and Annex III to, Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13), as amended by Council Decision 2014/659/CFSP of 8 September 2014 (OJ 2014 L 271, p. 54) and Council Decision 2014/872/CFSP of 4 December 2014 (OJ 2014 L 349, p. 58); and (ii) Article 3, Article 3a, Article 4(3) and (4), Article 5(2)(b), (c) and (d), Article 5(3) and (4) and Article 11(1)(a) of, and Annex VI to, Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 1), as amended by Council Regulation (EU) No 960/2014 of 8 September 2014 (OJ 2014 L 271, p. 3) and Council Regulation (EU) No 1290/2014 of 4 December 2014 (OJ 2014 L 349, p. 20),

THE GENERAL COURT (Sixth Chamber),

composed of G. Berardis (Rapporteur), President, D. Spielmann and Z. Csehi, Judges,

Registrar: L. Grzegorczyk, Administrator,

having regard to the written part of the procedure and further to the hearing on 14 December 2017,

gives the following

Judgment

Background to the dispute

1 The applicant, Gazprom Neft PAO, is a commercial company governed by Russian law and specialising in oil and gas exploration and production, the sale and distribution of crude oil and the production and sale of petroleum products. Its majority shareholder is Gazprom Joint Stock Company, which directly and indirectly holds 95.7% of its share capital. The Russian Government directly and indirectly holds 50.23% of the share capital of Gazprom Joint Stock Company.

2 On 20 February 2014, the Council of the European Union condemned in the strongest terms the use of violence in Ukraine. It called for an immediate end to the violence, and full respect for human rights and fundamental freedoms in Ukraine. The Council also envisaged the introduction of restrictive measures against those responsible for human rights violations, violence and use of excessive force.

3 At an extraordinary meeting held on 3 March 2014, the Council condemned acts of aggression by the Russian armed forces, which constituted a clear violation of Ukrainian sovereignty and territorial integrity, as well as the authorisation given by the Soviet Federatsii Federal’nogo Sobrania Rossiskoï Federatsii (Federation Council of the Federal Assembly of the Russian Federation) on 1 March 2014 for the use of the armed forces on the territory of Ukraine. The European Union called on the Russian Federation to immediately withdraw its armed forces to the areas of their permanent stationing, in accordance with its international obligations.

4 On 5 March 2014, the Council adopted restrictive measures focused on the freezing and recovery of misappropriated Ukrainian State funds.

5 On 6 March 2014, the Heads of State or Government of the European Union endorsed the Council conclusions adopted on 3 March 2014. They strongly condemned the unprovoked violation of Ukrainian sovereignty and territorial integrity by the Russian Federation and called on the Russian Federation to immediately withdraw its armed forces to the areas of their permanent stationing, in accordance with the relevant agreements. The Heads of State or Government of the European Union stated that any further steps by the Russian Federation to destabilise the situation in Ukraine would lead to additional and far-reaching consequences for relations in a broad range of economic areas between the European Union and its Member States, on the one hand, and the Russian Federation, on the other hand. They called on the Russian Federation to enable immediate access for international monitors, emphasising that the solution to the crisis in Ukraine had to be based on the territorial integrity, sovereignty and independence of Ukraine, as well as strict adherence to international standards.

6 On 16 March 2014, the legislature of the Autonomous Republic of Crimea and the local government of Sevastopol, both subdivisions of Ukraine, held a referendum on the status of Crimea. In that referendum, the people of Crimea were asked whether they wished to join the Russian Federation as a federal subject, or if they wished to restore the 1992 Constitution and Crimea’s status as a part of Ukraine. The reported result from the Autonomous Republic of Crimea was a 96.77% vote for integration of the region into the Russian Federation, with an 83.1% voter turnout.

7 On 17 March 2014, the Council adopted further conclusions with regard to Ukraine. The Council strongly condemned the referendum in Crimea on joining the Russian Federation, held on 16 March 2014, which it found to be in clear breach of the Ukrainian Constitution. It urged the Russian Federation to take steps to de-escalate the crisis, immediately withdraw its forces back to their pre-crisis numbers and garrisons in line with its international commitments, begin direct discussions with the Government of Ukraine and avail itself of all relevant international mechanisms to find a peaceful and negotiated solution, in full respect of its bilateral and multilateral commitments to respect Ukraine’s sovereignty and territorial integrity. In this respect, the Council expressed regret that the United Nations Security Council was not able to adopt a resolution, owing to a veto by the Russian Federation. Furthermore, the Council urged the Russian Federation not to take steps to annex Crimea in breach of international law.

8 On the same day, the Council adopted, on the basis of Article 29 TEU, Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 16), and, on the basis of Article 215 TFEU, Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 6), whereby it imposed travel restrictions and asset freeze measures targeting persons responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine as well as persons or entities associated with them.

9 On 17 March 2014, the Russian Federation officially recognised the results of the referendum held in Crimea on 16 March 2014. Following that referendum, the Supreme Council of Crimea and Sevastopol City Council declared the independence of Crimea from Ukraine and requested to join the Russian Federation. On the same day, the Russian President signed a decree recognising the Republic of Crimea as a sovereign and independent State.

10 On 21 March 2014, the European Council recalled the statement of the Heads of State or Government of the European Union of 6 March 2014 and asked the European Commission and the Member States to prepare possible further targeted measures.

11 On 23 June 2014, the Council decided that the import into the European Union of goods originating in Crimea or Sevastopol should be prohibited, with the exception of goods originating in Crimea or Sevastopol for which a certificate of origin had been issued by the Ukrainian Government.

12 Following the crash and destruction of Malaysia Airlines flight MH17 at Donetsk (Ukraine) on 17 July 2014, the Council requested the Commission and the European External Action Service (EEAS) to finalise their preparatory work on possible targeted measures and to present, no later than 24 July 2014, proposals for taking action, including on access to capital markets, defence, dual-use goods, and sensitive technologies, including in the energy sector.

13 On 31 July 2014, the Council adopted, on the basis of Article 29 TEU, Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13). On the same date, the Council adopted, on the basis of Article 215 TFEU, Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 1).

14 Annex II to Regulation No 833/2014 contains a list of the technologies referred to in Article 3 of that regulation, classified according to their combined nomenclature code. They include, mainly, line pipe of a kind used for oil or gas pipelines, rock-drilling or earth-boring tools, displacement pumps for liquids, liquid elevators, boring or sinking machinery for boring earth, and parts thereof, drilling or production platforms, mobile drilling derricks, sea-going light vessels...